One key purpose of economic regulation is
A) to force a firm to produce at the point at which marginal cost equals marginal revenue.
B) to control the quality of service provided by a monopolist.
C) to control the price that regulated enterprises are allowed to charge.
D) to focus on the impact of production on the environment and society, the working conditions under which goods and services are produced, and sometimes the physical attributes of goods.
Answer: C
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Sammy has a drone that he values at $1,500. Frank values the same drone at $1,000. The government offers a subsidy of $800 to the buyers of drones, and Sammy and Frank agree on a price of $1,600. The cooperative surplus for Sammy and Dean will be
A) $200. B) $300. C) $600. D) $800.
The data suggest that in the European Union countries, the natural rate of unemployment
A) is now higher than in the U.S. B) is no longer a relevant concept. C) has steadily declined over the past two decades. D) will soon exceed the percentage of the labor force that is working. E) has become less "natural," since it is now almost entirely determined by the policies of a few large corporations.
Given the production function and total cost function shown in Chapter 4, as production increases, total costs
A. decrease constantly. B. decrease for a while and then increase. C. increase for a while and then decrease. D. increase constantly.
The demand and supply curves in the market for gasoline are illustrated in the graph below.
Starting at the equilibrium point, if the government imposes a price ceiling of $10, consumer surplus will then be given by the area ________
A. C. B. A + B. C. A + D. D. A.